Will the sports bubble burst in 2023?

What a year for sport. Argentina’s victory in the World Cup final was the crowning moment of Lionel Messi’s career, and possibly the greatest match of all time.

Off the field of play, record-breaking deals just kept coming. Investors this year have fled from risky assets, popping the past decade’s bubbles in tech, crypto and Hollywood. And yet, sports transactions kept fetching higher and higher prices. Broadcasters are still paying up for elite sport because it’s pretty much the only product people watch live. And breakaway efforts such as the European Super League and Saudi Arabia-backed LIV Golf keep fighting for a piece of the pie. How long can sports defy all other markets? Will 2023 bring a reckoning?

Below, we also bring you the highlights from the FT/Scoreboard coverage in the past 12 months.

One last thing before signing off for the year: Join LaLiga President Javier Tebas, new AC Milan owner Gerry Cardinale, super agent Rafaela Pimenta and more at the Business of Football Summit on 1-2 March, 2023 to discuss the new wave of investment flowing into the game. As a Scoreboard subscriber, register for your complimentary digital pass using promo code PREMIUM23 or save £200 on your in-person pass to join us at The Biltmore Mayfair, on March 2. Register here. See you in 2023!

Do read on — Samuel Agini, sports business reporter

The sports investment boom — are we due a bust?

It’s been a heady week for sports deals, with not one, not two, but three major agreements signed in recent days.

On Monday, American investor John Textor added to his sporting empire with the acquisition of French football’s Olympique Lyonnais, valuing the group at €884mn and extending US influence in European clubs.

On Tuesday, the owner of the National Basketball Association‘s Phoenix Suns and Mercury agreed a deal to sell both teams at an enterprise value of $4bn, a record for a professional hoops franchise and nearly double the previous record price, set in 2019.

On Thursday, Google agreed to pay more than $14bn over seven years for the rights to broadcast the National Football League‘s Sunday Ticket subscription package, one of the largest ever broadcast deals for Big Tech.

It’s a fitting end to 2022, a year in which many new record deals were struck, including the most expensive professional club sale (the NFL’s Denver Broncos), the most highly valued English Premier League club acquisition (Chelsea FC) and continental European club sale (AC Milan). New records were also set in fees paid for Indian Premier League cricket rights, and rampant challenges to the status quo, exemplified best by Saudi-backed LIV Golf roiling the professional men’s tour.

Incumbent leagues still have advantages, as was the case when European football governing body Uefa took the upper hand in a legal battle against the body promoting a breakaway European Super League. Expect more skirmishes for the economics of football, with world governing body Fifa aiming to expand its World Cup model to clubs. And as investors assess the shifting landscape, watch out for further ownership changes.

As the ink dries on these latest deals, and with a number of A-list clubs and franchises exploring sales or investments (Manchester United, Liverpool FC, the Los Angeles Angels to name a few), is it possible the ongoing boom in sports deals may bust in the year ahead? And what are they really worth?

Since the start of 2022, the global economy has been gripped by inflation. Rising interest rates have damped dealmaking, and the broader effects of the Russian invasion of Ukraine have disrupted geopolitics, energy distribution, and even sport.

But optimism about the financial prospects for sport has fuelled record dealmaking. One top banker told Scoreboard this autumn that a $10bn pro-sports club sale isn’t unreasonable to expect. Optimists in the sector point to the rapid appreciation of sports assets throughout downturns, including the global financial crisis and the pandemic.

On the horizon are several further complications. The next big kahuna in sports media is the NBA, which is set to negotiate its next broadcast rights package in 2023. NBA commissioner Adam Silver has said the league is committed to expansion of franchises after the negotiations settle. The NFL has made no secret of its ambitions to move or establish a club of its own in Europe. But player associations will have their say before any of these expansion opportunities can be realised.

Highlights of the year

• It wasn’t a great year for Mercedes Formula 1 boss Toto Wolff. The team finished third in the constructors’ championship after getting the physics of the car wrong, ending a streak of eight consecutive titles. He didn’t shy away from failure in this instant classic Lunch with the FT.

• CVC Capital Partners’ ownership of F1 laid the groundwork for private equity to invest in sport. These days the firm’s interests are in football, rugby and volleyball. But will we see another deal come to pass? CVC’s initial public offering wouldn’t just be a test of investor appetite for private equity; it’s a question of sport.

• Dana White convinced Dwayne ‘The Rock’ Johnson to get on social media, went hunting with the ruler of Abu Dhabi and turned Ultimate Fighting Championship into one of the world’s biggest sports leagues. Yet he books fighters affiliated with Chechen dictator Ramzan Kadyrov. FT Mag had plenty to work with in this profile.

• It was some year for Lars Windhorst, soon-to-be former owner of Hertha Berlin. The German financier allegedly hired an Israeli private intelligence company to wage a clandestine campaign focused on ousting the former president of the football club. An investigation by law firm Noerr found that invoices for the campaign were paid from a bank account “attributed to” Windhorst, who had called the FT report “nonsense”.

• More than a decade since the Indian Premier League revolutionised cricket, clubs are going on an acquisition spree with global ramifications, private equity firms are diving in and global media companies are paying up. Must the league become bigger?

• Ten months after the Beijing 2022 Winter Olympics, no resolution has yet been reached in the doping case of Russian figure skater Kamila Valieva, whose positive test from December 2021 stalled medal ceremonies in the team event. Russia’s standing in the sporting world is now further complicated by the effects of Vladmir Putin‘s ongoing war in Ukraine.

• US cable billionaire Rocco Commisso bought ACF Fiorentina for €170mn in 2019. That’s when the trouble started, proving that getting the deal done isn’t the hardest part of owning an Italian football club.

• In lighter fare: take a spin through the joy and delirium that is March Madness, the annual US college basketball tournament. The 2022 tournament featured the underdog of all underdogs — the blistering run of tiny Saint Peter’s University — through a topsy-turvy weekend in Philadelphia.

Transfer Market

• Under Armour has named Stephanie Linnartz as president and chief executive of the sports apparel brand, effective end of February 2023. She comes to the Baltimore-based company after serving as president of Marriott International hotels, the second straight outsider appointed by the sporting brand to the top role since 2019. She is also the company’s first female chief executive, succeeding Patrik Frisk and company founder and longtime CEO Kevin Plank.

Final Whistle

Oh, to have been in Argentina this week. The nation celebrated its first World Cup victory in 36 years in ecstatic fashion, with millions flooding the streets, highways, and overpasses in Buenos Aires for the homecoming of Lionel Messi and company. The delirium was so spectacular a crowd of blue-and-white bedecked fans literally carried away a German newscaster mid-hit. One would-be Argentina celebrant did not have the greatest experience, however: Nusret Gökçe, the Turkish chef better known as Salt Bae, was rebuffed by Messi as he tried to mug the football legend for a selfie during post-final celebrations on the pitch in Qatar. It has since evolved into a micro-scandal, with Fifa investigating how Mr Bae accessed the area.